ENERGY

Natural-Gas Boom Has Regulators Scrambling

The Obama administration is moving forward on multiple fronts to regulate what has been described as America’s newfound energy panacea: natural gas.

Earlier this month the Environmental Protection Agency announced the first-ever air-emissions standards for hydraulic fracturing, a controversial technology that’s seen as key for developing the vast reserves of shale gas recently found around the country.

In the coming weeks, the Interior Department is expected to propose a trio of rules affecting companies drilling for natural gas on public lands, including one requiring drillers to disclose the chemicals they use in the process to extract the gas—a policy President Obama has touted several times since first stressing its importance in his State of the Union address in January. The other two Interior rules are aimed at ensuring that wells are constructed soundly and water is managed safely during the hydraulic fracturing (or “fracking”) process. Fracking injects large amounts of water, sand, and chemicals into shale rock to allow gas to be extracted.

The shale natural-gas boom has thrust the energy source into the national spotlight and onto Obama’s radar. In turn, a tug-of-war has begun between states and the federal government over who should do what to regulate gas development.

“I applaud the new rules,” Rep. Diana DeGette, D-Colo., said recently in anticipation of Interior’s regulations. “But this won’t have any impact on fracking done on private lands. So we need to have a similar strategy for drilling on private lands.”

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DeGette, a senior member of the House Energy and Commerce Committee and author of legislation that would create a national disclosure law and put fracking fluids under federal purview of the Safe Drinking Water Act, pointed out: “The vast majority of drilling is not on federal lands.”

In fact, just 14 percent of natural gas came from federal lands in 2010, according to Interior’s Bureau of Land Management. That percentage is probably going to go down as the shale gas reserves are discovered more on private lands, such as in Pennsylvania (which has no gas produced on public lands) and Arkansas (where about 17 percent of all federal leases are producing oil and natural gas, according to 2011 BLM data.)

These facts illustrate the limits facing the Obama administration and Democrats like DeGette who want to see greater federal oversight of natural-gas production. DeGette’s bill and a similar proposal introduced by Sen. Robert Casey, D-Pa., have virtually no chance at becoming law.

“There has been progress where states do their own thing,” Casey said recently. “If you have enough states that are requiring it in the absence of federal legislation that’s certainly helpful.”

For the foreseeable future, the country’s natural-gas producers will operate under a patchwork of state laws and Interior’s rules. The EPA’s clean-air rules announced last week are the only federal standard that applies to all producers in every state. To some lawmakers—including Democrats—this patchwork might be the best option.

“I thought we ought to have a national standard at one point,” Sen. Mark Udall, D-Colo., said recently. “But I’ve got to be a realist. I want to work with the industry to develop standards. They’ve been more focused working state to state and that’s where the action has been.”

All the federal rules the Obama administration is rolling out might make a casual observer think that the natural-gas industry has been unregulated up until now. But in fact, states have often been more successful than the federal government working with companies and understanding the regional geology—a key component of safely harnessing shale gas trapped in rock. Just last month, EPA withdrew its federal authority after inserting itself into environmental concerns with fracking issues in three different states -- Texas, Wyoming, and Pennsylvania.

Those three states and six others have their own laws regulating the drilling practice and requiring disclosure of fracking chemicals, according to a graphic compiled in February by Inside Climate News.

“I think we ought to be in a position where the federal government gives greater credence to state regulations,” said Rep. Cory Gardner, R-Colo. “I get the sense that the federal government thinks it can do everything and anything and it can trump state regulations.”